Unit Value and Return Rate
Historical NAV of XMM unit, measured in different currencies:
| (exchange rate)^ | |||||
| XMM/XRP | XMM/USD* | XMM/BTC* | USD/XRP | BTC/XRP | |
| 28/02/14 | 1.000 | 0.01420 | 0.00002481 | 70.44 | 40,300 |
| 31/03/14 | 1.426 | 0.01306 | 0.00002755 | 109.14 | 51,761 |
| 30/04/14 | 2.590 | 0.01370 | 0.00003103 | 188.98 | 83,466 |
| 31/05/14 | 3.084 | 0.01243 | 0.00002057 | 248.08 | 149,903 |
* Calculated based on the exchange-rates listed on the right columns.
^ exchange-rates are vwap of IOU.Bitstamp on the last day of each month (source: ripplecharts.com).
Montly return rate, measured in different currencies:
| ~XRP | ~USD | ~BTC | average | |
| Mar-2014 | 42.6% | -8.0% | 11.0% | 15.2% |
| Apr-2014 | 81.6% | 4.9% | 12.6% | 33.0% |
| May-2014 | 19.1% | -9.3% | -33.7% | -8.0% |
| 3-months return (28/2 ~ 31/5) |
208.4% | -12.4% | -17.1% | 59.6% |
Review and Comment:
In May, NAV of our fund appreciate 19% against XRP. However, it depreciated 9% against USD, and losing 34% as compared to BTC. Taking the average, our fund was suffering a loss of 8% during the month.
Reasons for the poorer performance in May:
- Increase in Fund size. (profitability tends to drop with bigger size of fund).
- Fund manager was on vacation during the last 10 days of the month, hence no trading or market-making activities during that period.
- I was spending more time on learning API and coding skill for developing some trading bots, hence less time was allocated for monitoring the markets and performing trades.
For the 3-months period ended 31st-May, our Fund recorded a +59.6% total return in average.
Market Making Activities
For BTC/XRP markets (about half of our assets was allocated for BTC/XRP) -- Our main focus was on Bitstamp and btc2ripple, and smaller support on Justcoin and The Rock Trading.
For Fiats-IOUs -- our main focus were still in USD and CNY, for the gateways Bitstamp, SnapSwap, RippleChina and RippleCN, with smaller amount of support for USD.RippleSingapore. We are considering to allocate some little resources for the IOUs of new members on IRBA list, namely Coinex and Bitso.
About 8% of our asset was allocated for silver market of XAG.RippleSingapore.
It's likely to add gold (XAG.RippleSingapore) into our portfolio in near future.
Units and Holders Analysis
| Unit in Circulation | |
| 28/02/14 | 111,042 |
| 31/03/14 | 167,198 |
| 30/04/14 | 245,885 |
| 31/05/14 | 424,209 |
| Number of holders on 31st-May | |
| < 10 unit | 8 |
| [10 – 100) | 7 |
| [100 – 1000) | 22 |
| [1k – 10k) | 30 |
| >= 10k | 10 |
| TOTAL | 77 |
Buy-back and New Issue
About 178k new units of XMM was issued during the month, represent an increase of >70% units-in-circulation as compared to end of April. The buy-back and new-issue prices were quoted with spread of ~7% most of time.
After some efforts learning nodejs and ripple-lib, I manage to develop a simple bot for monitoring NAV of our Fund and adjusting the buyback price automatically. The bot is still in beta and I'm testing it with a personal trading account. If everything work out smoothly, then the buyback mechanism of our Fund will probably be made fully automated soon (an official announcement will be made through this blog-page before any change taking effect).
If the automation of buyback mechanism is implemented successfully, XMM will then choose to stay in its current profit-accumulated model. Anyway, since we had seen a strong demand for dividend-payment fund from the discussions on xrptalks.org, I may consider to launch a new fund in profit-payout model (provided that I got extra time/energy for it).
Others
Recently I'm spending more time and effort in coding, for the automation of market-making activities. I hope that with the help of some trading bots, my workload may be decreased significantly. Then our Fund would be able to provide liquidity for more currency pairs and more gateways in the future.
There are also ideas of launching some low-risk funds (only trading single currency) in which market-making processes are totally automated with bots, and profit are being distributed through dividends.
And I'm happy to see that we got competitor now -- FMM fund operated by RippleFox.
Some dicussions and references about FMM:
https://xrptalk.org/topic/2567-ripplefox-market-making-fund/
https://xrptalk.org/topic/2738-ripplefox-fmm-updates/
Wish there will be more market-makers joining Ripple, for better health of the ecosystem.
